In The Morning News

USA Today: Government’s 2007 Long-Term Deficit Grew By $2.5 TrillionIn a front page story, USA Today (5/18, 1A, Cauchon, 2.28M) reports, “The federal government’s long-term financial obligations grew by $2.5 trillion last year, a reflection of the mushrooming cost of Medicare and Social Security benefits as more baby boomers reach retirement. That’s double the red ink of a year earlier.” In a analysis by USA Today, the paper found that Americans “are on the hook for a record $57.3 trillion in federal liabilities to cover the lifetime benefits of everyone eligible for Medicare, Social Security and other government programs,” a total of “nearly $500,000 per household.” Those unfunded liabilities dwarf “officially announced” federal deficit of “$162 billion.” And the reason is that, unlike corporations and state governments, “the [federal] government counts the cost of benefits for the current year,” rather than accounting for “lifetime benefits.” The largest liability “taken on in 2007” was for Medicare, estimated at “$1.2 trillion.”UPI: Survey Finds Low Level Of Understanding Of Health Plans“Gender may play a role in how people understand paying for healthcare but workers of both sexes generally do not understand coverage, a U.S. survey indicates.” According to “a survey by the Guardian Life Insurance Co of America…58 percent of women are more likely than 47 percent of men to find paying for healthcare premiums and out-of-pocket costs a challenge.” Among the other findings, “two-thirds of the employees surveyed said healthcare plans in general and healthcare coverage and benefits are difficult to understand,” and “less than 50 percent of baby boomers are currently planning or believe they are fully prepared financially for their healthcare in retirement.”MarketWatch : Proper Asset Allocation Seen As Mitigating Stock DownturnChuck Jaffe writes “on how entering the ‘distribution phase’ of your financial life at the wrong time can ruin your nest egg,” with the idea “that if you must withdraw funds from your retirement savings — the money you’re counting on to grow throughout your golden years — at a time when the anemic market is sucking dollars out of your portfolio, you can upset a lifetime of careful financial planning.” Jaffe adds that since “the accumulation phase (where you are building assets) is so different from the distribution phase (where you deplete your savings), many financial advisers suggest dividing assets accordingly.” Jaffe advises readers “keep in mind that the specific funds you own are less important than the asset allocation you create.”